Recent factory closures and production slumps in Germany have cast a bleak outlook on the once-industrial superpower. The German Federal Statistical Office reported that 2023 production output fell by 1.5%. Based on a Bloomberg report, numerous manufacturing facilities closed their doors for good over the past year. The recent closure of a 124-year-old business resulted in 1,600 job losses.
Bell tolling for Germany’s industrial superpower era
Since 2017, production in Germany has traced a downward line, which is steadily gaining negative momentum. It seems that the country is losing its competitive edge as the US shifts its procurement focus and China rises in the manufacturing sector. Some experts believe that inexpensive natural gas from Russia may be the final nail in the German production coffin.
Don’t miss out the latest news, subscribe to LeapRate’s newsletter
In November 2023, Reuters reported that German industrial manufacturing dropped by 0.7% as opposed to the predicted 0.2% rise. Reuters quoted Joerg Kraemer, a chief economist at Commerzbank, who said:
The unexpected fall in German industrial production in November shows that companies are increasingly reacting to falling order books.
Likewise, Stefan Klebert, the CEO of GEA Group AG, told Bloomberg that hope is dwindling. Established in the late 1800s, GEA Group supplies manufacturing equipment to production facilities. He said:
I am really uncertain that we can halt this trend. Many things would have to change very quickly.
This decline filters through to other sectors in Germany. Bloomberg stated that political ambivalence is amplifying ongoing local issues such as infrastructure decay and the loss of skills through an outgoing workforce. Insufficient math skills, for instance, can make a €14tn dent in the economy.
